CA AB2278

Increases the research and development tax credit from 15% to 20% of qualified research expenses for taxable years beginning on or after January 1, 2010, under both the Personal Income Tax Law and Corporation Tax Law.

Eliminates conformity to the alternative incremental credit and instead provides complete conformity to the alternative simplified credit under federal tax law (Section 41(c)(5) of the Internal Revenue Code as of January 1, 2010).

Limits qualified research and basic research credits to activities conducted within California only.

Allows excess research tax credits to carry over to subsequent taxable years until exhausted, and modifies gross receipts calculations to include only sales of property delivered or shipped to purchasers within California.

Takes effect immediately as a tax levy under Article IV of the California Constitution.